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Labor Relations Update

Split D.C. Circuit Panel Upholds NLRB: DirecTV Violated NLRA By Terminating Technicians For Statements Made During A News Interview

Posted in NLRA, NLRB, Protected activity, Section 8(a)(1), Unfair Labor Practices

In a 2-1 ruling in DirecTV Inc. v. National Labor Relations Board, the U.S. Court of Appeals for the D.C. Circuit affirmed the NLRB’s ruling that DirecTV must reinstate technicians who were terminated for complaining about a company pay policy during a television interview, finding that the employees’ conduct constituted protected, concerted activity and was not “so disloyal, disparaging and malicious” as to lose protection of the NLRA.

Background

In early 2006, DirecTV informed its installation contractors (whom DirecTV hires to install satellite television receivers in subscribers’ homes) that it wanted each of its television receivers to be connected to a working telephone landline in customers’ homes, which would offer additional options for the customers and allow DirecTV to track customers’ viewing habits to help guide its programming decisions. DirecTV informed MasTec Advanced Technologies, one of its installation contractors, that it would begin charging MasTec $5 for each receiver installed without a phone line connection.  MasTec in turn instituted a new pay policy under which technicians would be paid $2 less for each receiver they installed, but would receive an additional $3.35 if they connected the receiver to a phone line.  In addition, technicians who failed to connect receivers to phone lines more than half the time in a 30-day period would be “back-charged” $5 for each unconnected receiver.

MasTec technicians immediately began to express their displeasure over the new policy. In response, DirecTV and MasTec provided advice to the technicians on how they could connect more receivers.  Some of the advice either involved standard sales techniques or was “plainly not meant to be taken literally,” for example, a MasTec manager’s comment that technicians should tell customers that their DirecTV system would “blow up” without a phone connection.  The technicians “continued to voice their concerns and frustration,” but the pay policy remained in place.  A group of MasTec technicians then contacted a local news station, which agreed to air a story.  The technicians appeared at the news station in DirecTV vans and wearing their DirecTV uniforms.  They proceeded to discuss the pay policy and the “advice” that was provided to them about getting customers to connect their receivers to phone lines, with one of the technicians stating: “Tell the customer whatever you have to tell them.  Tell them if these phone lines are not connected the receiver will blow up.  We’ve been told to say that.  Whatever it takes to get that phone line into that receiver.”  After the segment aired, DirecTV instructed MasTec to terminate the technicians who appeared in the broadcast.

ALJ and Board Decisions

An unfair labor practice was filed against MasTec and DirecTV and the ALJ initially ruled in favor of the companies, finding that while the technicians’ television appeal related to an ongoing labor dispute (as necessary for their conduct to qualify as protected concerted activity under the NLRA), their actions nevertheless fell outside of the Act’s protections because they were “so disloyal, disparaging and malicious to be unprotected.”

The matter was appealed to the Board, which reversed the ALJ’s decision. The Board stated that, under the two-pronged test first set out in American Golf Corp., 330 NLRB 1238 (2000) (Mountain Shadows Golf), “employee communications to third parties in an effort to obtain their support are protected where: (i) the communication indicates it is related to an ongoing dispute and (ii) it is not so disloyal, reckless or maliciously untrue as to lose the Act’s protection.”

The Board found that the ALJ “clearly erred” with regard to the second prong of the test, as “almost all of the statements [made by the technicians during the broadcast] were truthful representations of what the companies told them to do,” and any “arguable departures from the truth were no more than good-faith misstatements or incomplete statements, not malicious falsehoods.” The Board further found, with regard to whether the statements amounted to “unprotected disloyalty or reckless disparagement,” that it “will not find a public statement unprotected unless it is flagrantly disloyal, wholly incommensurate with any grievances which the employees might have” and that the technicians’ statements did not meet that standard.

Circuit Court Decision

The D.C. Circuit affirmed the NLRB’s decision, finding that “the Board acted within its discretion” and did not reach a conclusion so unsupported by substantial evidence as to warrant a reversal.

Citing the Mountain Shadows Golf test, the court found that the “first prong of the test—whether ‘the communication indicates it is related to an ongoing dispute between the employees and the employers’—focuses on whether it would be apparent to the target audience that the communication arises out of an ongoing labor dispute.”  Here, stated the court, “there is no dispute” that the technicians’ statements in the interview segment satisfied this prong, and noted that the companies did not challenge the Board’s finding “that the employee communications here were clearly related to their pay dispute.”

As to the second prong of the test—whether the technicians’ third-party appeal communications were “so disloyal, reckless or maliciously untrue as to lose the Act’s protection” —the court first rejected the dissent’s argument that “the NLRA doesn’t immunize disloyal behavior.” Rather, stated the court, the issue is “not of whether the employees’ third-party appeal was disloyal, but instead of whether it exhibited ‘such detrimental disloyalty as to provide cause for dismissal,’” quoting the standard articulated by the Supreme Court in NLRB v. Local Union No. 1229, Int’l Bhd. of Elec. Workers, 346 U.S. 464 (1953) (Jefferson Standard).

In concluding that the Jefferson Standard test was not met here, the circuit court found that the Board had substantial evidence that the technicians’ statements were not flagrantly disloyal or maliciously untruthful.  The court cited the fact that the technicians approached the television station “only after repeated unsuccessful attempts to resolve” their dispute through discussions with MasTec.  The court also noted that although the newscast “shed unwelcome light” on the pay practices and “advice” in question, the segment “directly related to the technicians’ grievance about what they considered to be an unfair pay policy that they believed forced them to mislead customers” about the need for a phone connection.

Thus, the court affirmed the Board’s conclusion that the technicians’ statements were not “wholly incommensurate with their grievances.” The court also affirmed the Board’s finding that “while the technicians might have been aware that the newscast could lead some consumers to cancel their service, there was no evidence the technicians specifically intended to inflict such harm on the companies in their statements in the segment.”

Rejecting the companies’ argument that “it was maliciously untruthful for the technicians to say that they would lose money if they did not lie,” the court noted that the technicians “had little, if any, control over the editing of their interview or the content of the final segment” and agreed with the Board that the technicians’ statements “fairly reflected their personal experiences under the new pay scheme.”

In a dissent, U.S. Circuit Judge Janice Rogers Brown stated that this was “not a close case” and found that the technicians’ complaints about being instructed to lie were “malicious and untrue” and “crossed a line—from labor dispute to public disparagement.” Judge Brown also disagreed with the majority’s conclusion that there was no evidence that the technicians did not intend to inflict harm on the companies, stating: “Had the MasTec technicians honestly and fairly discussed their labor dispute with the news station, their aggressive tactics could be sustained as a proper appeal to outside parties. . . . But these technicians chose instead to feed the station a false, disparaging story they knew would trigger public outrage.”

This case reinforces the need for employers to carefully evaluate the risks of taking action against employees who make statements, particularly as a group, to outside parties about workplace grievances. As we have noted, the Board itself is hardly consistent in this area.

Labor Day Wouldn’t Be Labor Day Without New NLRB Decisions

Posted in General Counsel, NLRA, NLRB, Unfair Labor Practices

The onset of Labor Day and the end of the NLRB fiscal year (September 30) one can count on seeing a number of decisions issued.  This year is no different, and perhaps more are being issued during these last few days because Member Hirozawa’s term expired on Saturday August 27.

Here is a summary of a couple of decisions of note issued by the NLRB in the last few days.

Pre-Discipline Bargaining In Newly Represented Units Required (Again)

Over three years ago, a constitutionally infirm panel issued a decision requiring employers to bargain over discipline and termination in a newly organized workplace if the employer’s discipline system was discretionary.  We discussed that development in a past post.  That case ultimately was voided by the Supreme Court’s decision in Noel Canning.  

The NLRB in a new case Total Security Management Illinois 1, LLC, 364 NLRB No. 106 (August 26, 2016) returned to the invalidated standard, which applies to newly organized units before a collective bargaining agreement is negotiated (after which, all discipline/discharge would be submitted to a contractual grievance procedure).  The Board stated the new bargaining obligation as follows:

Under today’s decision, after the employer has preliminarily decided (with or without an investigatory interview) to impose serious discipline, it must provide the union with notice and an opportunity to bargain over the discretionary aspects of its decision before proceeding to impose the discipline.  At this stage, the employer need not bargain to agreement or impasse, if it commences bargaining promptly.  In exigent circumstances, as defined, the employer may act prior to bargaining provided that, immediately afterward, it provides the union with notice and an opportunity to bargain about the disciplinary action and its effects.

“Exigent circumstances” according to the Board is a reasonable good faith belief by the employer that the “employee has engaged in unlawful conduct that poses a significant risk of exposing the employer to legal liability for the employee’s conduct or threatens the safety, health or security inside or outside the workplace.”

What this means is that in the narrow circumstances of the date a union gains representational rights until the date a contract is reached, the employer must bargain over the discretionary aspects of discipline prior to imposing such discipline.  The risk of not engaging in such discipline of course, is now that a bargaining obligation attaches to the decision is that the discipline could be overturned by the NLRB.

The NLRB declined to extend this standard retroactively, so it will apply to discipline situations going forward as of August 26, the date of the decision.

Social Media Continues to Vex Employers 

The explosion of social media, in particular the ability of employees to immediately express themselves to a wide audience, is an area that has caused significant hand wringing when it comes to the NLRB.  We have discussed this issue many times including here, here and here.

Employers often want to regulate or outright prohibit the posts of employees, only to find out the NLRB deems such activity to violate the Act.  The decisions can seem confusing and conflicting.

A recent NLRB decision on this issue adds to the confusion.  In Chiptole Services LLC, 364 NLRB No. 72 (August 18, 2016) involved an employee who would use his Twitter account to respond to customers and sometimes fellow employees.  The case involved, among other things,  three “Tweets” the employer asked the employee to delete from his account, which he did.  These Tweets were as follows:

  • The employee tweeted the employer’s communication director a copy of a news article about people who have to work on snow days when public transportation was closed, adding the comment “Snow days for ‘top performers’ [communications director]?”
  • A customer posted “free Chipotle is the best thanks.” In response, the employee tweeted “nothing is free only cheap #labor.  Crew members make only $8.50hr  how much is that steak bowl really.”
  • A customer posted about guacamole.  The employee responded “its not free like #Qdoba. enjoy the extra $2.

The employee deleted the tweets.  As part of a larger unfair labor practice case (involving other issues including the employee’s termination), the issue of the deleted tweets was alleged as unlawful.

In finding a violation of Section 8(a)(1) the NLRB ALJ noted that the analysis for evaluating whether an employee’s actions are “protected, concerted activity” involves two prongs which are analyzed separately and objectively.  First, the employee’s action must be concerted.  Second, the purpose of the employee’s action must be for “mutual aid or protection.”.  In this case the Judge noted that the employee had not sought out other employees nor had he consulted with them before sending the tweets.  Nevertheless, the ALJ ruled the first prong was met because the employee was seeking group action because the tweets “did not pertain to wholly personal issues relevant only to [the employee] but were truly group complaints.”

On appeal a majority of the three member NLRB panel reversed this finding holding, simply, “On this record, we do not find that [the employee’s] were concerted.”  The footnote also states Chairman Pearce dissents, and would affirm the ruling except with respect to the tweet about the guacamole.

In sum, whether a social media posting by an employee  constitutes protected concerted activity can be very confusing.  This case illustrates that four NLRB employees (the ALJ and three Board members) were split evenly over whether the tweet constituted activity protected by the Act.

The best course is to be extra careful when considering taking action for an employee’s personal social media post, whether it is to ask the employee to delete the post or issue discipline.  If the post does not violate a clear (and lawful) employer policy there will be risk taking action.

 

NLRB Enforces Ambush Election Rules…..Then Finds Way Around Them

Posted in NLRA, NLRB, NLRB Election Rules

There has been a lot of hype about the so-called NLRB ambush election rules.  These are, of course, the NLRB’s take on fixing what it deemed a broken secret ballot election scheme, one allegedly marred by employers gaming the system to delay a secret ballot election.  Of the many new rules issued by the NLRB, one requires the parties to a representation petition to file a Statement of Position identifying all issues for hearing.  By identifying issues the Board hoped to avoid unnecessary hearings.  The Board felt this issue was so important that it adopted harsh consequences if such issues were not raised in the Statement of Position.  Under NLRB Rules and Regulations Section 102.66(d), a party failing to timely file a Statement of Position “shall be precluded from raising any issue, presenting any evidence relating to any issue, cross-examining any witness concerning any issue, and presenting any argument with respect to any issue not filed in a timely Statement of Position .. .”.  In other words, if the issue wasn’t raised in a timely fashion it shouldn’t be considered.  This is known as issue preclusion.

In one of the first applications of the rule the NLRB concluded that the rule applied to prevent a union facing a decertification petition from litigating an issue it had not timely raised.  The NLRB then promptly found a way to consider the issue anyway and dismissed the petition.  In Brunswick Bowling Products LLC, 364 NLRB No. 96 (August 25, 2016), an employee filed a decertification petition seeking a vote on whether to continue union representation.  The NLRB promptly sent out a notice of the required Statement of Position.  The union filed the Statement of Position identifying an issue that the petition was barred by the “contract bar” principle (which holds that a currently effective collective bargaining agreement precludes the filing of a decertification petition except for the 90 to 60-day period prior to the expiration), but approximately 3 hours and 20 minutes after the deadline.  The union then tried to raise the issue at the hearing and the employer objected, citing Rule 102.66(d).  The hearing officer nonetheless accepted the evidence and argument.  In issuing her decision, the Regional Director considered the evidence and dismissed the employee’s petition.

On appeal, the NLRB ruled that the Regional Director erred in accepting and considering the evidence.  The NLRB ruled that 102.66(d) does not require a showing of prejudice by a party.  The Board majority also noted that the union had not sought an extension of time to file its Statement of Position.

Nevertheless, the NLRB majority concluded that dismissal of the decertification petition was proper, explaining:

The contract bar issue was raised by the Petitioner [the employee] on the face of the petition, which stated that there was a current collective bargaining agreement covering the unit. The Regional Office then obtained a copy of the contract in the course of its prehearing investigation.  The Petitioner and the Employer further confirmed the existence of the contract before the opening of the hearing when they signed a stipulation to that effect.

The Board majority concluded that these facts were sufficient evidence of contract bar.

Member Miscimarra concurred in part and dissented in part to the decision, noting that the Board’s decision was an important clarification of the election rules:

Although the Election Rule can be read to state otherwise, the Board in today’s decision rightly places substance over form.  We uphold the Regional Director’s decision to reach and decide an outcome-determinative issue, even though the party in whose favor the Regional Director ruled failed to timely serve its Statement of Position in conformity with the Election Rule.

While Member Miscimarra concurred in the result he continued to dissent to the election rules themselves, as he has done from the beginning.

While the fact of the existing contract was known, it seems quite a stretch to extrapolate this fact to one where the contract bar issue was “raised” by the petitioner, an employee, who simply filled out the NLRB’s representation form.  Employees are often not versed in labor law and one doubts whether a very technical issue like “contract bar” would have been in the petitioner’s mind.

This case is very important because it does provide bright line guidance about issue preclusion.  Most petitions filed are representation petitions, where a union is seeking to represent the employees.  So employers need to be extra careful about raising all issues in the Statement of Position in a timely fashion or be precluded from asserting them.

NLRB Rules That Graduate Students Are Employees

Posted in NLRB

Earlier today, the National Labor Relations Board (“the Board”) issued its long awaited decision in Columbia University.  Not surprisingly, the Board, in a 3-1 decision, overturned 12 years of precedent by ruling that “student assistants” (including assistants engaged in research funded by external grants) who have a “common law” employment relationship with their university are employees as defined by the National Labor Relations Act (the “Act”), and therefore are entitled to the protections afforded to employees under the Act such as engaging in the right to unionize. 

The Board has equivocated on the issue of whether graduate students are employees as defined by the Act.  In 2000, the Board in its New York University decision determined that graduate students were employees under the Act.  Four years later in Brown University, the Board overturned New York University and held that graduate students were not employees.  With today’s ruling, the Board has yet again changed course on this issue.

In Columbia University, the Board held that student assistants could be employees as defined by the Act, while also being students.  Specifically, the Board held that “the payment of compensation, in conjunction with the employer’s control, suffices to establish an employment relationship for purposes of the Act.”

The Board’s decision in Columbia University and its very broad definition of what students can be classified as employees could have a significant impact on private universities across the country.  If you have questions about the application of this case please feel free to contact us. 

Non-Compete Agreement A Mandatory Subject of Bargaining, NLRB Rules

Posted in Collective Bargaining, Confidentiality, Employer policies, NLRA, NLRB, Section 7, Section 8(a)(1), Section 8(a)(5), Uncategorized, Unfair Labor Practices

The first day of employment is often chaotic.  New employees must learn their way around the jobsite, meet (and remember the names of) many new people and otherwise familiarize themselves with working at a new job.  Oh, and there’s the paperwork.  Seemingly endless mounds of paperwork.  New employees are asked to sign a multitude of documents concerning all aspects of employment.  Many of the documents are not something employees ever thoroughly read, like the employee handbook, which we’ve noted many times, including here and here,  can have serious consequences.

One such document employees often are asked to sign is a non-compete agreement, an agreement which basically restricts the ability of the employee to work for a competitor for a certain period of time after leaving employment.  These agreements also frequently prohibit the employee from sharing of knowledge learned at a prior place of employment.  The law varies widely from state to state as to the enforceability of non-compete agreements.

When employees are represented by a union the employer must consider whether all this new-hire paperwork is consistent with its obligation to bargain with the union.  In Minteq International, Inc., 364 NLRB No. 63 (July 29, 2016),  the NLRB recently ruled that an employer’s unilateral implementation of a non-compete agreement to new hire employees violated the law because the employer owed the union a duty to bargain over the non-compete agreement.

The facts are fairly straightforward.  The employer manufactures products used in the steel industry.  Its employees are represented by a union.  The parties entered into a collective bargaining agreement effective from 2011 to 2014.  Sometime during 2013, without informing the union, the employer implemented a requirement that each new-hire sign a non-compete agreement which restricted the signer’s ability to move to a competitor for 18 months following leaving the employment of the employer.  The agreement also prohibited the signer from disclosing certain confidential information about the company.  The non-compete was presented to the new hires during two days of paid orientation.  One bargaining unit member who had signed the non-compete agreement left employment to work for a competitor.  The employer sent the former employee letters “reminding him of his obligation” under the non-compete agreement.  The employee complained to his former union and charges were filed with the NLRB.

The parties’ collective bargaining agreement contained a management-rights clause giving the employer the right to “hire employees, determine their qualifications” and “issue amend and revise work rules” and “Standards and of Conduct . . .and to take whatever action is either necessary or advisable to manage and fulfill the mission of the Company. . ”

Although the bargaining allegation was before the Administrative Law Judge at trial, the judge did not address the issue.  Instead, the Administrative Law Judge found certain portions of the non-compete language to be unlawfully overbroad.  Both the General Counsel and the employer appealed.

The NLRB found the employer violated its duty to bargain in good faith by unilaterally implementing the non-compete agreement for new hires.  The NLRB found that the non-compete agreement was a mandatory subject of bargaining because “it settles an aspect of the relationship between the [employer] and its employees.  The [non-compete agreement] applies to individuals both while they are employed by the [employer] and after their employment with [the employer] has ended.”

The NLRB rejected the employer’s argument that the non-compete agreement was not a mandatory subject of bargaining because it contained no threat of discipline.  The NLRB concluded that “agreeing to comply with the requirements of the [non-compete] is a term of employment, implicit in the [non-compete] is the threat of discipline or discharge for failing to comply with its provisions.”  In other words, because the employee could violate the non-compete agreement while still employed (by disclosing confidential information or working for a competitor), it was likely there could be some consequences such as discipline or discharge making it sufficient to constitute a mandatory subject of bargaining.

The NLRB also found that the non-compete agreement was a mandatory subject of bargaining because it “effectively impos[es] a cost of lost economic opportunities on employees as a consequence of working for [employer].”  Also, the non-compete agreement’s assignment of inventions to the employer “imposes economic opportunity costs on employees by broadly restricting their ability to benefit from their discoveries, inventions, and acquired knowledge related to working for [employer].”

The employer contended it was privileged to implement the non-compete agreement because the parties had agreed to a management-rights clause.  As seems to be the new trend, the NLRB rejected this argument noting that “the management-rights clause at issue makes no reference to the non-complete/non-disclosure agreements and thus does not constitute” a clear and unmistakable waiver.

Finally, the NLRB evaluated the language of the non-compete agreement found by the Administrative Law Judge to be unlawfully overbroad.  In what seems to be a first the NLRB actually reversed the judge and found certain phrases to be lawful.  For example, the Administrative Law Judge found the non-compete agreement’s confidentiality policy overbroad because it prohibited the disclosure of “any other information which is identified as confidential by the Company.”  The NLRB reversed this conclusion, reasoning the language was lawful because read in context it was not overbroad:

Viewed in isolation, a prohibition on releasing ‘any . . . information which is identified as confidential by the Company’ would clearly be overbroad, since it would allow the [employer] to designate any information, including information about employees’ wages, benefits, or other terms and conditions of employment- as confidential and thus restrict employees’ exercise of their Section 7 rights.

However, the phrase containing this prohibition does not stand alone and must be read in context.

The NLRB noted the policy defined “confidential information” narrowly as “any proprietary or confidential information or know-how belonging to the company” and that definition was followed by examples of confidential information illustrating the scope of the policy.  This is, of course, the proper analysis set forth in the law concerning the evaluation of the lawfulness policy. What is startling is that the NLRB seems to have taken the time to look at, and analyze, the entire context of the phrase in question, something it doesn’t always do in its opinions.

Bottom line:  in a unionized context, make sure that all the policies being handed out in new-hire orientation are consistent with any obligation to bargain with the union representing the employees.  If the paperwork imposes conditions on employment there is a good chance it is something that must be addressed in bargaining with the union before it is implemented.  Finally, as noted, employers need to be wary of relying on the language of a management-rights clause before implementing a new work rule.

Recent NLRB Decision A Reminder That NLRA Can Protect Actions Of A Single Employee

Posted in Collective Bargaining, NLRA, NLRB, Protected activity, Section 7, Section 8(a)(1), Uncategorized, Unfair Labor Practices

So far, it has been a long quiet Summer with little NLRB activity, – with the exception of the recent ruling that temporary agency employees can be part of a bargaining unit with the principal employer’s employees, of course.  More change may be coming, though.  The end of the NLRB’s fiscal year is September 30 and one can always expect a flurry of decisions to issue before that date.

The Board is not completely inactive, of course.  We recently saw an interesting decision on management rights.

And, the Board also recently issued a decision concerning the scope of “protected concerted activity.”  When people think of the National Labor Relations Act they think of unions, of course.  The Act also evokes group action, like when employees band together to organize a union.  Generally speaking, in order for employees to be protected under the Act, two things must be present.  First, the activity must be “concerted.”  Second, the purpose of the activity must be “for the purpose of collective bargaining or other mutual aid or protection.”  Under Board precedent, activity is typically “concerted” only if engaged in by two or more employees.  What most people don’t realize, however, is that the Act, under certain circumstances, can and does protect an individual employee’s actions.

In Omni Commercial Lighting, Inc., 364 NLRB No. 54 (July 19, 2016) the NLRB ruled that an employee was fired in violation of the Act even though the employee’s actions leading up to his discharge were taken on his own behalf, and not in concert with others.  Nor were the employee’s actions motivated by a desire to spur group action.

In Omni, employee, an electrician and union member, interviewed with a job at the employer, Omni. In the Chicago area there were three different collective bargaining agreements covering various aspects of electrical work.  There was the Master Agreement (“MA”), the Sign Agreement and the Lighting Maintenance Agreement (“LMA”).  The MA provided the highest wages and benefits and the LMA provided the lowest wages and benefits.  The employee made clear in his interview that he wished to work under the MA, and received a response from the employer that it would be “fine.”  The employee accepted a job with a wage rate consistent with that under the MA.

A few months later, the employee discovered that the employer had actually signed the LMA with the union.  The employee complained both to his union and the employer, insisting that the employer had executed the wrong contract.  At a meeting to discuss the complaint, the employer initially told the employee that if he didn’t like working under the LMA he could go find another job.  Before the employee could respond the employer fired the employee.  The employee filed a charge against both the union and the employer asserting unlawful discharge.

The Board held, in a 2 to 1 vote, that the employee was violated for his protected activity in violation of Section 8(a)(1) of the Act.  The Board noted that the U.S. Supreme Court in NLRB v. City Disposal Systems, Inc., 465 U.S. 822 (1984) had adopted the Board’s “Interboro doctrine” which held that “an honest and reasonable invocation of a collectively bargained right constitutes concerted activity, regardless of whether the employee turns out to have been correct in his belief that his right was violated.”

The Board concluded the “collectively bargained right” invoked by the employee in Omni was his belief that he was entitled to the benefits of the MA, the richer collective bargaining agreement.  The issue then became whether the employee’s belief was “honest and reasonable.”  The Board majority had no problem finding that the employee had an honest and reasonable belief, noting that the employee had made clear in his job interview that he wanted to work under the MA, to which the employer responded “fine.”  The employee was paid the existing wage rate under the MA which was further indication the employee thought he was working under the MA.  Finally, the employee performed the same work he had performed for his predecessor employee while working under the MA.

One Board member – Miscimarra – dissented, writing that he would not find a violation of the Act because the employee was not asserting a right, – even a mistaken one – under a collective bargaining agreement:

Indeed, rather than reasonably and honestly invoking a right grounded in the applicable agreement –the LMA–[the employee] did precisely the opposite:  he spurned any rights afforded by the LMA and contended that the rights arising under a different contract (the MA, to which the Employer and Union were not signatory) should govern his employment.  The Interboro doctrine simply does not apply to these facts.

When running through a checklist of potential risks when terminating an employee, it is perhaps not a bad idea to keep the NLRA in mind as well.  It can and does apply to individual employee situations.

Stuck With It: Labor Board Forces Employers to Recognize Bargaining Units that Contain Employees of Two or More Separate Employers

Posted in Bargaining units, NLRB

Returning to a decision it made 16 years ago (but was overturned just 4 years after that), the National Labor Relations Board has once again ruled that it will certify a bargaining unit containing individuals from two or more separate employers without those employers’ consent. In Miller & Anderson, Inc., Case 05–RC–079249 (July 11, 2016), the Board returns to the standard that it created in 2000, in M. B. Sturgis, Inc., 331 NLRB 1298 (2000) (“Sturgis”) and then quickly overturned in Oakwood Care Center, 343 NLRB 659 (2004).

Except for the four years when Sturgis applied, the Board has consistently held that both employers must consent for the creation of bargaining units that combine employees of the two organizations.  This issue most commonly arises in joint employer situations, where a union seeks to represent  a group of similarly situated employees, but some of the employees are solely employed by a single employer and others are deemed to be jointly employed by two employers.    For example, a union could seek a bargaining unit comprised of both regular employees of a company and individuals engaged through a staffing agency.  This may also arise where a company subcontracts out certain services but may have employees on staff who share a community of interest with the individuals employed by the subcontractor.

In its decision, the Board gave two primary reasons for returning to Sturgis.  First, the Board concluded that a unit of both joint and single employed employees “logically falls within the ambit of a 9(b) employer unit” given the breadth of the statutory definition of the terms “employer” and “employee” and the Board’s statutory obligation to “to assure to employees the fullest freedom in exercising the rights guaranteed by th[e] Act[.]” Second, it found that the Sturgis rule does more to effectuate the fundamental policies of the Act. Among other things, the Board noted that the Sturgis rule is “manifestly more responsive . . . to assure to employees the fullest freedom in exercising the rights guaranteed by the Act.” The Sturgis rule, it reasoned, allows employees to best exercise their right to self-organization because it does not require them to obtain employer permission before organizing in their desired unit.

Member Miscimarra penned a passionate dissent. After renewing his objection to the Board’s recent expansion of the joint-employer doctrine in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (August 27, 2015) (“BFI”) generally, he outlined several concerns with the majority opinion. He posited that Sturgis units will result in confusion and instability, pose significant administrability problems, and runs contrary to the Act’s requirements and sound policy considerations. He was especially concerned that a return to Sturgis would result in employers being forced to engage in multi-employer bargaining without their consent and without taking into account any potential conflicts of interest. Additionally, he was disturbed by the fact that the Board, under Sturgis, could force employers to bargain with individuals with whom they have no real employment relationship.

The majority decision attempted to address some of the dissent’s concerns, suggesting that Sturgis units are different than traditional multi-employer bargaining units because in multi-employer bargaining units there is “no common user employer,” so conflicts of interest, and other concerns, should not be significant.

The decision is the Board’s logical, yet troubling, progression after the Board’s holding last year in BFI which broadened the standard for assessing joint-employer status under the National Labor Relations Act.  Between BFI and Miller, all companies that supply or purchase services from another entity with absolutely no expectation of creating any potential bargaining relationships, could easily be subjected to unexpected long-term obligations with unions and their business partners – a factor that should be taken into consideration in entering into, renewing, or continuing any such relationships.

NLRB Majority, Management Rights Clause Must Be Specific To Enable Employer To Make Unilateral Changes

Posted in Collective Bargaining, Duty to furnish information, Duty to provide information, NLRA, NLRB, Section 8(a)(5), Unfair Labor Practices

Collective bargaining agreements, do not, and cannot cover every issue that will arise during their term.  Matters concerning terms and conditions of employment that are not addressed in the labor contract have to be negotiated before changes can be made.  Sometimes, however, the parties agree that management can make changes to certain terms and conditions of employment unilaterally during the term of the agreement through a management-rights clause.   In such cases, the union waives the right to bargain over certain issues.  The presence of a management-rights clause, particularly one that is detailed, is a function of leverage in bargaining, and of the history between the parties.  Management-rights clauses serve an important role in labor relations as they set forth the issues the parties have agreed to leave to management’s discretion.  Or, at least that used to be the case.

In a recent decision, the NLRB appears to have heightened the standard for evaluating whether a union has waived the right to bargain over certain terms and conditions of employment in a management rights clause by requiring a new level of specificity in the contractual language before an employer can make unilateral changes.  In Graymont PA, Inc., 364 NLRB No. 37 (June 29, 2016), a three member majority, with one member dissenting (the NLRB currently has only four members), decided that an employer violated the Act by not giving the union an adequate opportunity to bargain before it changed its existing policies.

The facts are similar to those that play out frequently in labor relations.  The employer and union were parties to a collective bargaining agreement containing a broad management rights clause which, among other things, provided that the employer”[R]etains the sole and exclusive rights to manage; to direct its employees; to evaluate performance, . . to discipline and discharge for just cause, to adopt and enforce rules and regulations and policies and procedures; [and] to set and establish standards of performance for employees. . . .”

The employer decided to make changes to the existing work rules, absenteeism policy and progressive discipline policy, and before doing so informed the union.  The union requested a meeting and also requested information related to the changes.  The employer agreed to a meeting at which it informed the union in writing that the employer had no obligation to bargain over the revised rules, referencing the language concerning the employer’s “sole and exclusive” right to “adopt and enforce” rules and regulations and policies.  The employer’s letter also stated that because it had no obligation to bargain over the changes it had no duty to provide the information requested by the union.  During the meeting the union officials expressed concerns about the policy changes, a few of which resulted in the employer making revisions.  There were no further meetings between the parties prior to the employer’s implementation of the changed policies.  Although the union filed a grievance over the matter, it ultimately withdrew it and filed charges with the NLRB.

An Administrative Law Judge found the employer violated the law by its implementation of the policies.  The Administrative Law Judge dismissed the allegation regarding refusal to provide information because the complaint alleged only that the employer refused to provide information and the employer claimed it did not possess responsive information.

On appeal, the NLRB affirmed the violation of the duty to bargain over the changes and also found a violation with respect to the employer’s delay in providing a response to the information request.

Board Majority Ruling On Management Rights

In finding a failure to bargain over the rule changes, the Board reviewed the law concerning waiver.  The Board noted the longstanding “clear and unmistakable waiver” standard applied, under which the parties must “unequivocally and specifically express their mutual intention to permit unilateral action with respect to a particular employment term, notwithstanding the statutory duty to bargain that would otherwise apply.” (quoting its prior decision in Provena St. Joseph Medical Center, 350 NLRB 808, 811 (2011)).  The Board also noted that its precedent required the matter “at issue to have been fully discussed and consciously explored during negotiations and the union to have consciously yielded or clearly and unmistakably waived its interest in the matter.”  Johnson-Bateman Co., 295 NLRB 180, 185 (1989).

Applying these principles, the Board found a violation because “none of the contractual management rights provisions specifically reference work rules, absenteeism, or progressive discipline.”  The Board also noted that the employer’s letter to the union “made no mention of this [the management rights] provision.”  The Board distinguished the language before it with language it previously found constituted a waiver of bargaining in United Technologies Corp., 287 NLRB 198, 198 (1987) enf’d 884 F.2d 1569 (2d Cir. 1989).  In United Technologies, the employer unilaterally changed its progressive discipline policy.  In finding no violation of the Act, the Board found the following language of the management rights clause was specific enough to privilege the employer to make the changes to the discipline system, where management had “the sole right and responsibility to direct the operations of the company and in this connection….to select, hire, and demote employees, including their right to make and apply rules and regulations for production, discipline and safety…”  In contrast, the Board in Graymont found the language at issue was deficient because it did not specify “discipline” or “absentee” provisions in connection with its right to adopt and enforce rules.

NLRB Member Miscimarra dissented, writing that he would find no violation, and that the majority had unnecessarily parsed the language:

Management-rights language may be general and, at the same time, clear and unmistakable.  Here, the parties agreed that Graymont reserved the right, without exception, ‘to adopt and enforce rules and regulations and policies and procedure.’ No reasonable person reading this language could conclude that Graymont’s right of unilateral action extended to rules, regulations policies and procedures concerning some matters but not others.

 

Timeliness of a Response to Information Request Can Constitute Violation Even If Not Alleged In Complaint

The Board also found the employer violated the Act by failing to timely respond to the information request, even though it apparently had no relevant information to provide, and even though the delay in responding to the request was not an allegation in the complaint.  In Graymont, the employer informed the union (and the NLRB) in its answer to the complaint that it did not possess any information.  Graymont asserted because the complaint did not allege that the Act was violated by the delay in providing information or a response there could be no violation.  In finding no violation the Administrative Law Judge relied Raley’s Supermarkets and Drug Centers, 349 NLRB 26 (2007), where an allegation of delay in responding to an information request was dismissed because the complaint contained no such allegation. The Board concluded that Raley’s was “wrongly decided” and specifically reversed its holding.  The Board concluded that the allegations of delay and refusal to provide information are so closely related that the employer was put on notice that such a violation could be found even if it was not pled in the complaint.

* * * *

This decision demonstrates the difficulty, and uncertainty, faced by employers in asserting rights, especially in an absolutist fashion.  Undoubtedly the employer believed it was asserting a right it had secured in bargaining, something for which it perhaps had made concessions.  The employer even referenced the exact language upon which it was relying, only to be criticized by the Board for not specifically citing the provision.  Under the Board’s formulation, because in the management-rights language there was no topic identified specifically tied to allowing the employer to “adopt and enforce rules and regulations and policies and procedures,” such language effectively was rendered meaningless.

The fact the union did not pursue arbitration is interesting, too; the union consciously decided to remove the dispute from the agreed upon grievance process.   Finally, it is arguable that the parties did in fact bargain over the issue because the employer met with the union and made revisions to the rule changes based on the union’s concerns before implementing the new rules.

As to the information request issue, the current NLRB has taken the position that all requests for information need to be responded to in a timely fashion, even if the request does not seek information the employer is required to provide.

It seems clear that management-rights language will have to be more specific to withstand the scrutiny of the NLRB.  When in doubt, employers should meet with the union to fully discuss matters before making changes.  Employers also should always timely respond to all information requests even if there is nothing to provide or if the request seeks information the employer believes it is not obligated to furnish to the union.

In for the Long Haul as the Fifth Circuit Upholds NLRB’s “Quickie” Election Rule

Posted in NLRA, NLRB

Last April, the National Labor Relations Board (“Board”) implemented it’s new expedited union representation procedures. On June 10, 2016, in Associated Builders and Contrs. Of Tex v. NLRB, 15-cv-50487  2016 U.S. App. LEXIS 10552 (5th Cir. June 10, 2016) the Fifth Circuit upheld the new procedures, commonly called “quickie” election rules – – rejecting the Associated Builders and Contractors of Texas’ (“ABC”)) arguments that the rule exceeded the Board’s authority under the National Labor Relations Act (“NLRA”) and that it violated the Administrative Procedures Act (“APA”).

Specifically, ABC alleged that the rule exceeded the Board’s authority under Section 9 of the NLRA by allowing regional directors to preclude employers from contesting voter eligibility issues. The Court, however, found that ABC did not identify any statutory language or legislative history requiring litigation of all voter eligibility issues at the pre-election hearing. The Fifth Circuit agreed with the Board’s position that Inland Empire District Council, Lumber & Sawmill Workers Union v. Millis, 325 U.S. 697, 706 (1945) granted the Board wide discretion to devise the procedures to determine whether a representation question exists and rejected ABC’s argument that Inland was inapplicable because it was decided prior to the Taft-Hartley amendments.

ABC also challenged the rule on grounds thathe the rule’s provisions requiring disclosure of personal employee information both before and after the pre-election hearing conflicted with federal privacy law and that the requirements were ‘arbitrary and capricious’ under the APA. The court rejected the first argument on grounds that ABC failed to identify any federal law restricting disclosure of employee information to unions by employers. With regards to the second argument, the court found that the Board had properly considered privacy concerns, advancement in communication technology and the potential for union abuse in formulating rule. As a result, the court held that the Board’s rule was not ‘arbitrary and capricious’.

The Court also rejected ABC’s claims that the new rule would violate the free speech provision of the NLRA. Rather, the court held that the discretion afforded regional directors in setting election dates, provided sufficient protection for employers and employees to engage in meaningful speech.

Given the Court’s decision, employer’s must continue to be prepared for operating under the “quickie” rules in the event of an organizing drive. If you have any questions regarding the rules or further impacts of the 5th Circuit’s decision, we are always available to assist you.

Board Reverses 32-Year-Old Rule Allowing Employers to Oust Mixed-Guard Unions

Posted in Bargaining units, NLRA, NLRB, Section 9(b)

For thirty-two years, it has been a settled proposition that an employer may, upon the expiration of a contract, refuse to continue to negotiate with a “mixed-guard” union that represents its security guards. Continuing its long path of upsetting established precedent, on June 9, 2016, the National Labor Relations Board (“NLRB” or “Board”) reversed this and made clear that going forward a voluntary recognition of such a mixed-guard unit will require continued recognition just like any other bargaining unit. Loomis Armored US, Inc., 364 N.L.R.B. No. 23 (June 9, 2016).

A “mixed-guard union” is a labor organization that represents both security guards and other nonguard employees. Section 9(b)(3) of the National Labor Relations Act (“NLRA” or the “Act”) expressly prohibits the Board from certifying mixed-guard unions as the collective bargaining representative for security guards.  However, the Board has long held that an employer may voluntarily recognize a mixed-guard union as the representative of its employees.

In 1984, in Wells Fargo, the Board held that if an employer voluntarily recognizes a mixed-guard union, it may later withdraw recognition from the union for any reason as long as there was no contract in effect. Wells Fargo Corp., 270 N.L.R.B. 787 (1984).  The Board’s holding was based in part on the legislative intent behind Congress enacting Section 9(b)(3) of the Act, which was aimed “to shield employers of guards from the potential conflict of loyalties arising from the guard union’s representation of nonguard employees or its affiliation with other unions who represent nonguard employees.”

In Loomis, the Board completely overruled Wells Fargo.  The Board held that once an employer voluntarily recognizes a mixed-guard union, it may only withdraw recognition if the union loses majority support among the employees.  This rule applies to all other bargaining units, and the Board reasoned that the same rule should apply to guards as well – – placing an emphasis on the importance of preserving “stability in collective bargaining,” a tenet of the NLRA.

The Board dismissed the presence of any inconsistencies between its holding and the “conflict of loyalties” that concerned Congress when enacting Section 9(b)(3). The Board explained that employers recognizing mixed-guard unions will trade their ability to remove the union with whatever advantage recognizing the union brings the employer:  “An employer of guards thus may conclude that the potential conflict that concerned Congress either is not present or is outweighed by the potential advantages of entering into a collective-bargaining relationship with a mixed-guard union. And, in fact, a significant number of employers have availed themselves of this option.”  (Of course, those employers voluntarily recognized when they knew they could withdraw that recognition without challenge in the future.)

Importantly, though, the Board refused to apply its holding retroactively. Therefore, the Board’s rule from Wells Fargo will apply to all past and current cases, and the new Loomis holding will only apply to future cases.

Board Member Miscimarra dissented from the majority, arguing that the Board’s holding in Wells Fargo is more in line with the Congressional intent behind Section 9(b)(3) of the Act.  He stated  that “[i]f Congress deemed it objectionable to have guards represented by ‘certified’ mixed guard/nonguard unions, such an arrangement would appear equally objectionable when provided by a mixed guard/nonguard union that received voluntary recognition.”  Thus, Member Miscimarra found that it would be most consistent with Congressional intent to never allow mixed-guard unions to represent guards.  Still, he acknowledged some countervailing reasons for permitting voluntary recognition of mixed-guard unions, such as the need for unions to expand their membership.  Ultimately though, Member Miscimarra held that the Board in Wells Fargo applied Section 9(b)(3) in the “most appropriate manner.”  He further concluded that after thirty-two years of the Wells Fargo rule, the Board lacked compelling reasons to reverse the rule.

This case is very important for companies that employ security guards. Employers that currently recognize a mixed-guard unit/union must understand their continuing obligation to recognize the union, even after contract expiration – – a change which may materially impact bargaining leverage in future negotiations.  Moreover, employers with non-union security guards should also be cognizant of the shift in the law, which may limit the likelihood of future voluntary recognitions.  If a mixed-guard union seeks voluntary recognition, the employer should be aware that agreeing to that request will now bind the employer unless and until the union loses majority support.